Intel unveils £67bn chipmaking expansion plan for Europe

US chipmaker Intel has unveiled plans to invest up to 80 billion euros (£67 billion) across Europe as part of an ambitious expansion aimed at evening out imbalances in the global semiconductor industry that have led to big chip shortages.

Chief executive Pat Gelsinger said Intel was investing the money over the next decade “along the entire semiconductor value chain”.

The company plans to spend tens of billions setting up or expanding chip production sites and establishing research and development or design centres in Germany, Ireland, France and Italy.

“Why are we doing this? Because the world has an insatiable demand for semiconductors, or chips,” Mr Gelsinger said in a webcast.

Intel said it is bringing its most advanced technology to Europe to address the need for a “more balanced and resilient” semiconductor supply chain.

European Union leaders last month announced a 47 billion dollar (£36 billion) Chips Act to help the continent become a major semiconductor producer and curb its dependency on Asian markets for the tiny components, which act as the electronic brains for everything from cars to smartphones and game consoles.

Demand for chips has surged as the global economy bounced back from the Covid-19 pandemic, but supply has not kept up because of bottlenecks.

European Commission president Ursula von der Leyen hailed the announcement as the first major achievement under the EU Chips Act.

“I’m sure it will pave the way for more companies to follow suit,” said Ms von der Leyen, who wants the EU to double its share of global chip production to 20% by 2030.

Ursula von der Leyen
Ursula von der Leyen (Steve Reigate/Daily Express/PA)

The first phase of Intel’s investment plans include 17 billion euros (£14 billion) to beef up its European production capacity with a leading-edge semiconductor “mega-site” in Magdeburg, Germany.

The site will include two semiconductor factories that will make chips with Intel’s most advanced technology. If the European Commission gives approval, it is expected to break ground next year and come online by 2027, creating 3,000 high-tech jobs.

The plans also call for 12 billion euros (£12 billion) to expand Intel’s existing site in Leixlip, Ireland, by doubling manufacturing space and expanding its new foundry services business, to build chips designed by other firms. That will bring the company’s total Irish investment to more than 30 billion euros (£25 billion)

Intel says it is also in talks with Italy “to enable a state-of-the-art back-end manufacturing facility” that would involve potential investment of up to 4.5 billion euros (£3.7 billion) and create thousands of direct and indirect jobs.

There are also plans for a research and development hub and a foundry design centre in France, expanded lab space in Poland and to team up with local researchers for an advanced computing lab in Spain.

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